MADRID/NEW YORK (Reuters) – Repsol SA has struck a deal to buy a stake in Hecate Energy to give the Spanish energy company a platform to expand in the growing U.S. renewable energy market, three people familiar with the matter said.
The exact size of the stake that Repsol is acquiring could not be learned, but one of the sources said it would pay “a few hundred million dollars” for a significant interest in Hecate, with the option to buy the rest later.
The deal is expected to be announced as early as Thursday, the sources said, requesting anonymity ahead of the official statement. Repsol declined to comment. Hecate did not respond to a comment request.
European oil and gas companies such as Repsol are buying up wind farms and solar plants and building expertise in the sector amid pressure from investors and governments to tackle climate change.
Repsol has said it plans to grow its renewable generation capacity by more than 10 times the 1 gigawatt of hydropower and wind capacity it had installed at the end of last year. It is in talks with potential partners who could take a stake in its low-carbon business before a possible future market listing.
Until now, Repsol’s business in the United States has focused on hydrocarbon production. It has a footprint in the Marcellus shale field in Pennsylvania and the Buckskin production block in the Gulf of Mexico.
Hecate Energy, on the other hand, is one of the largest privately owned developers and operators of solar power plants in the United States. It manages more than 20 solar projects that are either operating or at late stages of development, in countries including the United States, Canada and Jordan.
Owned by a group of private investors, Hecate also has a pipeline of projects with more than 40 gigawatts of capacity, according to its website.
Reporting by Isla Binnie in Madrid and David French in New York; editing by Richard Pullin